Problems of Economic Development and Growth in Zambian Agriculture-An Evaluatuion of the Role of Capital formation in Agricultural Productivity

Abstract

Economic development and growth in Zambia has bee n thought to b sustainable through the development of agriculture in the broad context of rural development. However, agriculture is a complex and diverse industry. Its dimensions embrace a broad spectrum of activities and its problems as intricate, “deep” and diverse as the industry itself. Despite investment programs and political encouragement agriculture in Zambia has ben growing in terms of output at a rate lower than the growth in consumption and contribution to the Gross Domestic Product(GDP) has stagnated at about 11.48 percent over the period 1975 to 1980. Zambia has therefore continued to face shortfalls in its major staple food, which is maize, since 1970. In addition to this shortfall, changing consumption patterns have accelerated the demand for wheat grains and this demand has expanded tremendously over the period 1970 to 1980. Production of other agricultural commodities has assumed an upward trend but does not satisfy the entire Zambian demand. In 1963, 20.5 percent, 35.6 percent and finally 41.4 percent in 1969, 1974 and 1980, respectively (1, page 3). Those persons who migrated were mostly young able-bodied male and also mostly literate. Reacting to what constituted a major rural-urban drift creating a shortage of labor in the rural sector and agriculture in particular, taken together with the need to rapidly increase the productivity of agriculture, the government encouraged the rapid mechanization and adoption of other expensive type technologies. Due to limitation in data, this creative component attempts to evaluate the impact of this capital accumulation approach by regressing a production function of the Cobb-Douglas form. The equation specifies output in agriculture as a function of labor, land and capital embodied in investments of a capital nature. The results show that capital’s contribution to output is negligible and this finding leads to an examination of alternative strategies and policy options to stimulate agricultural productivity and attain desirable distributive impacts consistent with economic development as defined in this paper and also to meet the objectives of the government as stated in the planning documents.